SERVICE CONTRACT

 

<PAGE>

 

 

                                                                    Exhibit 10.4

                                SERVICE CONTRACT

 

In Guatemala City, on the twelfth day of February of 2002; We, on the ONE PART

mister LUIS GENARO MORALES PADILLA, forty eight years of age, married, doctor

and surgeon, Guatemalan, herein domiciled, identify myself with Personal

Identification Card Number A dash one and register four hundred forty eight

thousand forty eight, Granted by the Municipal Mayor of this city, I act in my

capacity of President of the Board of Directors and legal representative of the

Guatemalan Pediatric Foundation (" Fundacion Pediatrica Guatemalteca"); in

conformity with my appointment conferred in a Notary Act. authorized in this

city on the 19th day of February 2001 by Notary Public Raymundo Caz Tzub, and

inscribed in the civil registry of this city, under Article No. one hundred

forty two, of Folio one hundred two Book six of Auxiliaries of Juridical

Persons; is therefore authorized to subscribe the present act; henceforth named

"Contractor"; and, on the OTHER PART mister JAMES A. TANTILLO, foreigner, of

legal age, Puerto Rico, transient in this city, I am identified with passport

issued by the Secretary of State of the United States of America with number one

hundred eleven million thirty thousand one hundred sixty seven, I act in

representation of ALLIANCE SYSTEMS, INC., company duly organized under the laws

of the Commonwealth of Puerto Rico, with address at Condado Avenue number eight

hundred four San Juan, Puerto Rico USA (henceforth called "AS", and, NET LOTTERY

SERVICES LTD., corporation duly organized under the laws of the Republic of

Ireland, with its address at Fumbally Court, Dublin, Ireland, and also under the

laws of the State of New Jersey USA, at its address at eleven Meadow Lane,

Pennington, New Jersey zero eight five three four (HENCEFORTH NAMED "NLS" OR THE

OPERATOR). The parties with the intention of offering to the general public

lottery games

 

<PAGE>

 

through the Internet as a direct communication system and/or by wireless

communication Systems and/or through connections at fixed points of sale, this

Service Contract is established for the Administration, Operation and

development of lottery games through the internet. The Contractor is authorized

by Legislative Decree No. Thirteen dash eighty six Law for the Creation of the

Children's Lottery and its By-Laws for the development and operation of

different types of lottery games. In acceptance of our respective circumstances,

we have agreed to celebrate the present covenant in order to offer

administrative services and make available to the public, by Internet or

wireless Systems, lottery games and at an opportune moment to equip fixed points

of sale to offer the public games in this manner, in conformity with the

following terms:

 

FIRST: DEFINITIONS. In this Agreement the following terms will have the

following meanings: 1) Agreement means this covenant or contract, and all of its

parts or amendments. 2) Games mean any scheme, plan, game, operation or

arrangement whereby prizes in the form of money, property or benefit is given to

persons that submit themselves to the rules of the games accessed through the

Internet or wireless networks, where the winners will be determined by incidence

of luck amongst the ticket holders (tangible or cybernetic). The games may

include games of all types, among others, instant win tickets of any kind, and

also traditional lotteries, raffles, numbers, Lotto, Bingo, Keno or cards,

telephone bets, or through E-Mail or others. 3) OPERATOR means the operator of

the system. AS and NLS. 4) Network of Internet Lotteries means the network of

dozens of State Lotteries and Institutions for charitable purposes that have

joined the Operator's system to create opportunities of winning large prizes and

provide economies of operations and promotions. 5) Income means the gross sale

collected by the

 

<PAGE>

 

Operator, of the sale of any product related with this Agreement and its

Internet games less automatic discounts and other credits issued due to voided

tickets, and discounts for bank charges. 6) Fixed Network Expenses mean all the

costs related to the maintenance and operation of the system including software

license costs, commissions to re-sellers or operators at points of sale, legal

expenses or of consultants, advertising and promotions, and the costs of

administration and maintenance; and others specified mutually by the Contractor

and the Operator. 7) Net Profit means those of Income less paid out Prizes, less

Fixed Network Expenses in accordance with reasonable procedures of accounting,

the fifth point and the formula agreed upon mutually between the Contractor and

the Operators. 8) Just Cause mean reasons based on laws, rules, agreements and

covenants which a reasonable person can understand and justify actions based on

the reasoning provided.

 

SECOND: APPOINTMENT OF THE OPERATOR. 1) The Contractor agrees to grant to the

Operator the administration, operation and handling of all aspects of the

administration of Internet Lottery games or by wireless networks, in the

territory of the Republic of Guatemala. 2) The term of this Contract is seven

years, renewable automatically for a second seven-year term, which begins at the

official start of sales. The Contractor is obliged to prohibit the licensing to

any other company, firm, seller or person to direct, operate, or commercialize

any part or parts of the activities of lottery games through the Internet or

wireless networks, in his territory. Likewise the Operator may not offer

services to another person in the Republic of Guatemala for similar projects.

The conditions for the extension or renovation of this Contract will be

determined by mutual accord between the parts at an opportune moment. 3) The

Operator: a) will be the

 

<PAGE>

 

exclusive operator and provider of the activities that are a result of the

Lottery by Internet or wireless access, including without limitation, equipment,

programming, support Systems, design and marketing; back-up Systems, all on his

own account; b) responsible for the contracting, payment and training of the

necessary personnel for the activities, as well as the acquisition by his own

account and risk of Systems, goods and means necessary for the development of

operations and including Internet Systems and other wireless networks and will

provide working capital inherent to the business; c) provide Systems for

validation, distribution, payment Systems and accounting; d) registration of

patents, brands, propaganda symbols, and required programming for the handling

of games, whose licenses will be active until the end of the term of the

agreement; e) provide statements of accounts and other necessary monthly reports

and a yearly statement audited by an accredited firm of certified public

accountants. At any time the Contractor may verify accounts related to sales.